Parliamentary Replies
Published Date: 13 September 2016

Reply to Parliamentary Question on Motor Vehicle Financing Rules




Date: For Parliament Sitting on 13 September 2016

Name and Constituency of Member of Parliament

Mr Pritam Singh, MP, Aljunied GRC


To ask the Prime Minister (a) how many financial institutions have been investigated from 2013 to 2016 for bypassing loan restrictions on motor vehicles; and (b) whether there are any plans to tighten the regulations to effectively authenticate the purchase price of motor vehicles stated in the loan agreements.

Answer by Mr Ong Ye Kung, Acting Minister for Education (Higher Education and Skills) and Senior Minister of State for Defence, on behalf of Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:

1   Financial institutions (FIs) regulated by MAS are required to ascertain the reasonableness of the stated purchase prices of motor vehicles quoted in loan applications. They have in place policies and procedures to do so. These procedures include obtaining multiple motor vehicle valuations from independent sources and comparing them against price lists published by authorised dealers.

2   As part of MAS’ ongoing supervision, MAS monitors FIs’ compliance with rules and regulations, including through on-site inspections. Since the motor financing rules were reintroduced in 2013, MAS has not had to take any regulatory actions against FIs. There is hence also no immediate need to tighten the regulations.

3   It is also in the interest of an FI to ensure that motor vehicles are appropriately valued so that loans are adequately collateralised and comply with MAS’ financing rules.

4   However, where an FI is found in breach of any of our regulations, MAS will not hesitate to take regulatory action.